Pension savings credit

I don't know what pensions savings credit is.

That's a new one on me, too - here's a link that explains whether you are eligible

www.pensioncredit.org.uk/

I don't know why the government is changing the threshold when it has just been publicised that pensioners have been the most affected by the recession, to the tune of between 15 and 20% higher costs.

My neighbour has received a letter to say that her pension credit will be reduced in April because of a rise in her State Pension.

Oooh! I wonder if we can expect a letter saying our pensions have gone up by £50 because they reduced the fuel allowance? No?? Oh.........!

Carol, I've just checked that link, but it doesn't seem to have anything to say about 'savings credits'. I had believed that you were 'rewarded' for making some provision towards retirement, but there doesn't seem to be anything about that. Am I perhaps not seeing the correct information?

Carol

I'm perhaps being more than normally thick here, but I've never been able to find out how you can benefit from pension credits through having saved? Does it mean that if you have savings, and/or have an occupational pension, that you can receive pension credits for doing so?

I have been a CAB advisor for about 10 years and I STILL don't fully understand savings credits. I know you apply for this alongside pension credits. Try this web site and if in doubt phone the pension credit helpline. Even they sometimes seem a bit unsure.

www.direct.gov.uk/en/Pensionsandretirementplanning/PensionCredit/DG_184357

Update of my forum regarding Pension Savings credit. This credit is awarded if you have some private pension but not enough to make it up to a "living wage".
They are changing the threshold for this credit and it will mean less for anyone on it.
It is also impossible to find the right information on the Government website, and if you do find any, it doesn't explain how it is worked out, just how to apply to check if you are eligible.
Although I remain grateful for this benefit, it seems that the government gives with one hand and takes away with another. My state pension goes up in April but my savings credit goes down.

The government sets a minumum income that all pensioners should receive. This is currently £137.35pw if you are single and £209.70pw if you are a couple.

Pensions Credit is divided into two parts. The first part called Guarantee Credit will take your income up to the rates given above if your income from all sources is less than that. There are quite complicated rules about adding notional extra weekly income to your figure if you savings are above a certaan level so working this out is quite difficult.

The second part of Pensions Credit is called Savings Credit and is meant to 'reward' people for the saving they did either by building up a capital sum or by paying into pension schemes that take their income a little above the figures at the top of this missive. How this is calculated is too complicated for me to explain here but essentially it gives extra money to single people with an income up to about £190pw and couples with an income of about £300pw, although towards the top of this range the money is pennies rather than pounds but for those at the bottom of the range it can be up to £50.00.

I think what is happening in April is that while pensions and the minimum income guaranteed areboth going up, the minimum income is not going up as much as the pension so for example if you are on Pension Guarentee Credit and your pension goes up £5.00 if the minimum income only goes up by £3.00 then, you will get £2.00 less top up and be £2.00 less well off than pensioners who are not on Pensions Guarentee Credit

Or to put it another way the government is making the poorest pensioners pay for the mess we are in rather than spreading it evenly over all pensioners. I think it is iniquitous and utterly unjust.

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*FlicketyB` well done for putting it in plain english !

I actually understood that FlicketyB thank you.

Flickety, can you tell me if I would have to apply for savings credit, or if this is automatically looked at when you try to apply for Pension Credits? I've filled out the online form with all the relevant details, but obviously there is no section for savings credits.

Flickety - well done - a clear explanation. Just shows once again how lucky we are to be able to draw on so many different areas of expertise. Certainly proves that GN is about a lot more than knitting and cooking!

Greenmosgiel, When you apply for Pension credit they will look at your entitlement to both. You do not have to apply separately for both.

I was a volunteer Benefits Advisor with Age Concern for 10 years but stopped doing this about 3 years ago when funding for the scheme ran out. This is why I qualify everything I say because although interest and knowledge, and some clients I still visit mean I try to keep up with all the changes but sometimes I miss some of the nuances.

And can I do a 'puff' for Age UK as it is now known. They are very knowledgeable about benefits of all kinds and can help with many other problems. When I worked for them I dealt with everything from helping a client whose neighbour had an aggressive dog that had bitten her to dealing with financial misselling. If you have a problem speak to them.

FlicketyB - thank you for getting back to me on this. You've explained everything so well. I understand it so much better!